UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2021

Commission File Number 001-35817

VYANT BIO, INC.

(Exact name of registrant as specified in the charter)

Delaware		04-3462475
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

2 Executive Campus

2370 State Route 70, Suite 310

Cherry Hill, NJ 08002

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (201) 479-8126

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 Par Value		VYNT		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated Filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

There were 28,985,814 shares of common stock, par value $0.0001 of Vyant Bio, Inc. issued and outstanding as of August 12, 2021.

Vyant Bio, Inc. and Subsidiaries

INDEX

		Page No.

Part I	Financial Information
Item 1:	Condensed Consolidated Financial Statements (Unaudited)	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4:	Controls and Procedures	41

Part II	Other Information	42
Item 1:	Legal Proceedings	42
Item 1A:	Risk Factors	42
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3:	Defaults Upon Senior Securities	42
Item 4:	Mine Safety Disclosures	43
Item 5:	Other Information	43
Item 6:	Exhibits	43

Signatures		44

Part I Financial Information

Item 1 Financial Statements

Vyant Bio, Inc.

(Formerly Known as Cancer Genetics, Inc.)

Consolidated Balance Sheets

(Unaudited)

(Shares and USD in Thousands)

	June 30,			December 31,
	2021			2020

Assets
Current assets:
Cash and cash equivalents	$	26,485		$	792
Trade accounts and other receivables		1,261			357
Inventory		407			415
Patent held for sale		30			-
Prepaid expenses and other current assets		1,890			223
Total current assets		30,073			1,787
Non-current assets:
Fixed assets, net		1,654			1,031
Operating lease right-to-use assets, net		1,068			1,095
Intangible assets, net		9,262			-
Goodwill		21,703			-
Long-term prepaid expenses and other assets		1,641			136
Total non-current assets		35,328			2,262
Total Assets	$	65,401		$	4,049

Liabilities, Temporary Equity and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	1,016		$	1,300
Accrued expenses		1,246			162
Deferred revenue		1,416			92
Obligations under operating leases, current portion		490			486
Obligation under finance lease, current portion		31			-
Other current liabilities		3			9
Current liabilities of discontinued operations		436			-
Total current liabilities		4,638			2,049
Obligations under operating leases, less current portion		576			627
Obligations under finance leases, less current portion		66			-
Share-settlement obligation derivative		-			1,690
Warrant liability		1			-
Accrued interest		-			277
Long-term debt		57			6,839
Total Liabilities		5,338			11,482

Commitments and Contingencies (Note 15)		-			-
Temporary Equity
Series A Convertible Preferred stock, $0.0001 par value; 4,700 shares authorized, 0 and 4,612 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively (liquidation value of $0 and $11,732, respectively, as of June 30, 2021 and December 31, 2020)		-			12,356
Series B Convertible Preferred stock, $0.0001 par value; 4,700 shares authorized, 0 and 3,489 shares issued and outstanding, as of June 30, 2021 and December 31, 2020, respectively (liquidation value of $0 and $15,707, respectively, as of June 30, 2021 and December 31, 2020)		-			16,651
Series C Convertible Preferred stock, $0.0001 par value; 2,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020 (liquidation value of $0 as of June 30, 2021 and December 31, 2020)		-			-
Total Temporary Equity		-			29,007

Stockholders’ Equity (Deficit)
Preferred stock, authorized 9,764 shares $0.0001 par value, none issued		-			-
Common stock, authorized 100,000 shares, $0.0001 par value, 28,985 and 2,594 shares issued and outstanding as of June 30, 2021, and December 31, 2020, respectively		3			-
Additional paid-in capital		109,567			1,514
Accumulated comprehensive loss		(1	)		-
Accumulated deficit		(49,506	)		(37,954	)
Total Stockholders’ Equity (Deficit)		60,063			(36,440	)

Total Liabilities and Stockholders’ Equity (Deficit)	$	65,401		$	4,049

See Notes to Unaudited Consolidated Financial Statements.

Vyant Bio, Inc.

(Formerly Known as Cancer Genetics, Inc.)

Consolidated Statements of Operations

(Unaudited)

(Shares and USD in Thousands)


	Three months ended June 30						Six months ended June 30
	2021			2020			2021			2020
Revenues:
Service	$	1,831		$	40		$	1,947		$	176
Product		116			59			222			91
Total revenues		1,947			99			2,169			267

Operating costs and expenses:
Cost of goods sold – service		1,027			38			1,116			170
Cost of goods sold – product		345			147			741			313
Research and development		910			593			1,730			1,602
Selling, general and administrative		3,664			408			4,880			1,241
Merger related costs		165			-			2,310			-
Total operating costs and expenses		6,111			1,186			10,777			3,326
Loss from operations		(4,164	)		(1,087	)		(8,608	)		(3,059	)

Other (expense) income:
Change in fair value of warrant liability		-			-			214			-
Change in fair value of share-settlement obligation derivative		-			(211	)		(250	)		(211	)
Loss on debt conversions		-			-			(2,518	)		-
Other income (expense)		(25	)		1			(25	)		1
Interest income		3			-			3			-
Interest expense		-			(36	)		(368	)		(37	)
Total other (expense) income		(22	)		(246	)		(2,944	)		(247	)
Loss before income taxes		(4,186	)		(1,333	)		(11,552	)		(3,306	)
Income tax expense (benefit)		-			-			-			-
Net loss	$	(4,186	)	$	(1,333	)	$	(11,552	)	$	(3,306	)

Net loss per common share:
Net loss per share attributable to common stock - Basic and Diluted	$	(0.14	)	$	(0.54	)	$	(0.72	)	$	(1.34	)
Weighted average shares outstanding:
Weighted average common shares outstanding - Basic and Diluted		28,985			2,468			16,156			2,464

See Notes to Unaudited Consolidated Financial Statements.

Vyant Bio, Inc.

(Formerly Known as Cancer Genetics, Inc.)

Consolidated Statements of Temporary Equity and Common Stockholders’ Equity (Deficit)

(Unaudited)

(Shares and USD in Thousands)

Three months ended June 30, 2021 and 2020

-				Amount					Amount					Amount		Equity					Amount		Capital		Deficit			Loss			(Deficit)
	Series A				Series B						Series C				Total							Additional					Accumulated			Total Common Stockholders’
	Preferred Stock				Preferred Stock						Preferred Stock				Temporary			Common Stock				Paid in		Accumulated			Comprehensive			Equity
	Shares		Amount		Shares			Amount			Shares		Amount		Equity			Shares		Amount		Capital		Deficit			Loss			(Deficit)
Balances as of March 31, 2021		-	$	-		-		$	-			-	$	-	$	-			28,985	$	3	$	109,205	$	(45,320	)	$	-		$	63,888
Issuance of shares for service
Issuance of shares for service, shares
Issuance of Series C Convertible Preferred shares, net of issuance costs of $214
Issuance of Series C Convertible Preferred shares, net of issuance costs of $214, shares
Issuance of Series B Convertible Preferred shares, net of issuance costs of $41
Issuance of Series B Convertible Preferred shares, net of issuance costs of $41, shares
Issuance of Common Stock for acquisition consideration
Issuance of Common Stock for acquisition consideration, shares
Issuance of Incremental shares to StemoniX shareholders upon Merger
Issuance of Incremental shares to StemoniX shareholders upon Merger, shares
Conversion of Preferred Stock to Common Stock upon Merger
Conversion of Preferred Stock to Common Stock upon Merger, shares
Stock-based compensation		-		-		-			-			-		-		-			-		-		362		-			-			362
Exercise of stock options
Exercise of stock options, shares
Exchange of Series B Preferred Stock for 2020 for Convertible Notes
Exchange of Series B Preferred Stock for 2020 for Convertible Notes, shares
Conversion of 2020 Convertible Notes to Common Stock upon Merger
Conversion of 2020 Convertible Notes to Common Stock upon Merger, shares
Preferred stock warrant settled for Common Stock upon Merger
Preferred stock warrant settled for Common Stock upon Merger, shares
Warrant liability reclassified to equity upon Merger
Foreign currency translation adjustment		-		-		-			-			-		-		-			-		-		-		-			(1)			(1	)
Net loss		-		-		-			-			-		-		-			-		-		-		(4,186	)		-			(4,186	)
Balance as of June 30, 2021		-	$	-		-		$	-			-	$	-	$	-			28,985	$	3	$	109,567	$	(49,506	)	$	(1	)	$	60,063

Balance as of March 31, 2020		4,612	$	12,356		3,976		$	19,344			-	$	-	$	31,700			2,468	$	-	$	1,112	$	(31,277	)	$	-		$	(30,165	)
Issuance of shares for services		-		-		-			-			-		-		-			4		-		6		-			-			6
Stock-based compensation		-		-		-			-			-		-		-			-		-		55		-			-			55
Exchange of Series B Preferred Stock for 2020 Convertible Notes		-		-		(468	)		(2,588	)		-		-		(2,588	)		-		-		-		-			-			-
Net loss		-		-		-			-			-		-		-			-		-		-		(1,333	)		-			(1,333	)
Balance as of June 30, 2020		4,612	$	12,356		3,508		$	16,756			-	$	-	$	29,112			2,472	$	-	$	1,173	$	(32,610	)	$	-		$	(31,437	)

See Notes to Unaudited Consolidated Financial Statements.

Vyant Bio, Inc.

(Formerly Known as Cancer Genetics, Inc.)

Consolidated Statements of Temporary Equity and Common Stockholders’ Equity (Deficit)

(Unaudited)

(Shares and USD in Thousands)

Six months ended June 30, 2021 and 2020

	Series A Preferred Stock						Series B Preferred Stock						Series C Preferred Stock						Total Temporary			Common Stock				Additional Paid In		Accumulated			Accumulated Comprehensive			Total Common Stockholders’ Equity
	Shares			Amount			Shares			Amount			Shares			Amount			Equity			Shares		Amount		Capital		Deficit			Loss			(Deficit)
Balance as of December 31, 2020		4,612		$	12,356			3,489		$	16,651			-		$	-		$	29,007			2,594	$	-	$	1,514	$	(37,954	)	$	-		$	(36,440	)
Stock-based compensation		-			-			-			-			-			-			-			-		-		728		-			-			728
Exercise of stock options		-			-			-			-			-			-			-			-		-		4		-			-			4
Issuance of Series C Convertible Preferred shares, net of issuance costs of $214		-			-			-			-			567			1,786			1,786			-		-		-		-			-			-
Issuance of Common Stock for acquisition consideration		-			-			-			-			-			-			-			11,007		2		59,918		-			-			59,920
Issuance of incremental shares to StemoniX shareholders upon Merger		-			-			-			-			-			-			-			805		-		-		-			-			-
Conversion of Preferred Stock to Common Stock upon Merger		(4,612	)		(12,356	)		(3,489	)		(16,651	)		(567	)		(1,786	)		(30,793	)		11,197		1		30,792		-			-			30,793
Conversion of 2020 Convertible Notes to Common Stock upon Merger		-			-			-			-			-			-			-			3,339		-		16,190		-			-			16,190
Preferred stock warrant settled for Common Stock upon Merger		-			-			-			-			-			-			-			43		-		-		-			-			-
Warrant liability reclassified to equity upon Merger		-			-			-			-			-			-			-			-		-		421		-			-			421
Foreign currency translation adjustment		-			-			-			-			-			-			-			-		-		-		-			(1	)		(1	)
Net loss		-			-			-			-			-			-			-			-		-		-		(11,552	)		-			(11,552	)
Balance as of June 30, 2021		-		$	-			-		$	-		$	-		$	-		$	-			28,985	$	3	$	109,567	$	(49,506	)	$	(1	)	$	60,063

Balance as of December 31, 2019		4,612		$	12,356			3,735		$	18,045			-		$	-		$	30,401			2,456	$	-	$	1,047	$	(29,304	)	$	-		$	(28,257	)
Stock-based compensation		-			-			-			-			-			-			-			-		-		97		-			-			97
Issuance of shares for services		-			-			5			30			-			-			30			4		-		6		-			-			6
Exercise of stock options		-			-			-			-			-			-			-			12		-		23		-			-			23
Issuance of Series B Convertible Preferred shares, net of issuance costs of $41		-			-			236			1,250			-			-			1,250			-		-		-		-			-			-
Exchange of Series B Preferred Stock for 2020 Convertible Notes		-			-			(468	)		(2,569	)		-			-			(2,569	)		-		-		-		-			-			-
Net loss		-			-			-			-			-			-			-			-		-		-		(3,306	)		-			(3,306	)
Balance as of June 30, 2020		4,612		$	12,356			3,508		$	16,756			-		$	-		$	29,112			2,472	$	-	$	1,173	$	(32,610	)	$	-		$	(31,437	)

See Notes to Unaudited Consolidated Financial Statements.

Vyant Bio, Inc.

(Formerly Known as Cancer Genetics, Inc.)

Consolidated Statements of Cash Flows

(Unaudited)

(USD in Thousands)


	Six months ended June 30,
	2021			2020

Cash Flows from Operating Activities:
Net loss	$	(11,552	)	$	(3,306	)
Reconciliation of net loss to net cash used in operating activities:
Stock-based compensation		728			133
Amortization of operating lease right-of-use assets		135			244
Depreciation and amortization expense		567			287
Change in fair value of share-settlement obligation derivative		250			211
Change in fair value of warrant liability		(214	)		-
Change in fair value of 2020 Convertible Note with fair value election		4			-
Accretion of debt discount		173			13
Loss on conversion of debt		2,518			-
PPP loan forgiveness		-			(649	)
Loss on equipment		6			29
Changes in operating assets and liabilities, net of impacts of business combination:
Trade accounts and other receivables		(34	)		(54	)
Inventory		8			(50	)
Prepaid expenses and other current assets		(1,208	)		151
Accounts payable		(1,081	)		459
PPP loan proceeds		-			730
Obligations under operating leases		(162	)		(247	)
Accrued expenses and other current liabilities		(808	)		12
Net cash used in operating activities		(10,670)			(2,037	)

Cash Flows from Investing Activities:
Purchase of equipment		(520	)		-
Proceeds from sale of equipment		-			17
Cash acquired from acquisition		30,163			-
Net cash provided by investing activities		29,643			17

Cash Flows from Financing Activities:
EIDL loan proceeds		-			67
Issuance of common stock		4			23
Issuance of Series B Preferred stock, net of issuance costs		-			1,250
Issuance of Series C Preferred stock, net of issuance costs		1,786			-
2020 Convertible Note proceeds		5,022			332
Principal payments on long-term debt		(82	)		-
Proceeds from related party notes		-			80
Principal payments on obligations under finance leases		(10	)		(37	)
Net cash provided by financing activities		6,720			1,715
Net increase (decrease) in cash and cash equivalents		25,693			(305	)
Cash and cash equivalents, beginning of the period		792			315
Total cash and cash equivalents, end of period	$	26,485		$	10
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	7
Cash paid for income taxes		-			-
Non-cash investing activities:
Fair value of non-cash merger consideration	$	59,920		$	-
Equipment purchases in accounts payable	$	37		$	-
Right-of-use assets obtained in exchange for new operating lease liabilities	$	83		$	-
Non-cash financing activities:
Conversion of Preferred Stock to Common Stock upon Merger	$	30,793		$	-
Conversion of 2020 Convertible Notes and accrued interest to Common Stock upon Merger	$	16,190		$	-
Exchange of Series B Preferred stock for 2020 Convertible Notes	$	-		$	2,569
Reclass warrant liability to equity upon Merger	$	421		$	-

See Notes to Unaudited Consolidated Financial Statements.

Vyant Bio, Inc.

(formerly known as Cancer Genetics, Inc.)

Notes to Condensed Consolidated Financial Statements

Period Ended June 30, 2021

(Unaudited)

Note 1. Organization and Description of Business

Vyant Bio, Inc. (“Vyant” or “the Company”) is an innovative biotechnology company focused on partnering with pharmaceutical and other biotechnology companies to identify novel biological targets and therapeutics through the integration of human-derived biology with data science technologies and investigational new drug (“IND”) expertise.

The Company has two wholly-owned operating subsidiaries StemoniX, Inc. (“StemoniX”) and vivoPharm Pty Ltd (“vivoPharm”). StemoniX develops and manufactures high-density, at-scale human induced pluripotent stem cell (“iPSC”) derived neural and cardiac screening platforms for drug discovery and development. vivoPharm has an extensive set of anti-tumor referenced data based on predictive xenograft and syngeneic tumor models to provide discovery services such as contract research services, focused primarily on unique specialized studies to guide drug discovery. By combining the two companies, Vyant intends to build on the historic businesses and empower the discovery of new medicines and biomarkers through the convergence of its novel human biology and software technologies.

In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), the Company has omitted footnote disclosures that would substantially duplicate the disclosures contained in the audited consolidated financial statements of the Company. These unaudited condensed consolidated financial statements should be read together with the audited financial statements of StemoniX, Inc. for the year ended December 31, 2020, and notes thereto included in the Company’s April 5, 2021 Form 8-K report as filed with the SEC.

In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting solely of those which are of a normal recurring nature, necessary to present fairly its financial position as of June 30, 2021 and the results of its operations, cash flows and changes in stockholders’ equity (deficit) for the three and six months ended June 30, 2021 and 2020. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the entire 2021 year.

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide. Many of the Company’s customers worldwide were impacted by COVID-19 and temporarily closed their facilities which impacted revenues in the first half of 2020 for StemoniX. While the impact of the pandemic on our business has lessened, the global outbreak of COVID-19 continues with new variants and is impacting the way we operate our business as well as in certain circumstances limiting the availability of lab supplies. The extent to which the COVID-19 pandemic may impact the Company’s future business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

The Company is actively monitoring the impact of the COVID-19 pandemic on its business, results of operations and financial condition. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition in the future is unknown at this time and will depend on future developments that are highly unpredictable.

Dollar amounts in tables are stated in thousands of US dollars.

Note 2. Cancer Genetics, Inc. Merger

The Company formerly known as Cancer Genetics, Inc. (“CGI”), StemoniX and CGI Acquisition, Inc. (“Merger Sub”) entered into a merger agreement on August 21, 2020, which was amended on February 8, 2021 and February 26, 2021(as amended, the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Merger Sub was merged (the “Merger”) with and into StemoniX on March 30, 2021, with StemoniX surviving the Merger as a wholly owned subsidiary of the Company. For U.S. federal income tax purposes, the Merger qualified as a tax-free “reorganization”. Concurrent with the Merger closing, the Company changed its name to Vyant Bio, Inc. Under the terms of the Merger Agreement, upon consummation of the Merger, the Company issued (i) an aggregate of 17,977,544 shares of VYNT common stock, par value $0.0001 per share (the “Common Stock”) to the holders of StemoniX capital stock (after giving effect to the conversion of all StemoniX preferred shares and StemoniX 2020 Convertible Notes) and StemoniX warrants (which does not include a certain warrant (the “Investor Warrant”) issued to a certain StemoniX convertible note holder (the “Major Investor”)), (ii) options to purchase an aggregate of 891,780 shares of Common Stock to the holders of StemoniX options with exercise prices ranging from $0.66 to $4.61 per share and a weighted average exercise price of $1.46 per share, and (iii) a warrant (the “Major Investor Warrant”) to the Major Investor, expiring February 23, 2026 to purchase 143,890 shares of Common Stock at a price of $5.9059 per share in exchange of the Investor Warrant.

The Merger was accounted for as a reverse acquisition with StemoniX being the accounting acquirer of CGI using the acquisition method of accounting. Under acquisition accounting, the assets and liabilities (including executory contracts, commitments and other obligations) of CGI, as of March 30, 2021, the effective time of the Merger were recorded at their respective fair values and added to those of StemoniX. Any excess of purchase price consideration over the fair values of the identifiable net assets is recorded as goodwill. Total consideration paid by StemoniX in the Merger amounted to $59.9 million, which represents the fair value of CGI’s 11,007,186 shares of Common Stock or $50.74 million, 2,157,686 Common Stock warrants or $9.04 million and 55,907 Common Stock options outstanding on the date of the Merger with a fair value of $139 thousand. In addition at the time of the Merger, existing StemoniX shareholders received an additional 804,711 incremental shares due to the conversion ratio agreed to in the Merger Agreement.

StemoniX and CGI incurred $165 thousand and $2.3 million of costs associated with the Merger that have been reported on the consolidated statements of operations as Merger related costs for the three and six months ended June 30, 2021, respectively. There were no merger related costs on StemoniX’s statements of operations for the three and six months ended June 30, 2020. As of June 30, 2021 and December 31, 2020, accounts payable includes $20 thousand and $1.0 million of Merger-related costs.

The following details the preliminary allocation of the purchase price consideration recorded on March 31, 2021, with adjustments recorded in the second quarter of 2021 and balances as of June 30, 2021.

	March 31, 2021		Adjustments			June 30, 2021
Assets acquired:
Cash and equivalents	$	30,163	$	-		$	30,163
Accounts receivable		705		-			705
Other current assets		806		164			970
Intangible assets		9,500		-			9,500
Fixed assets		416		(15	)		401
Goodwill		22,164		(461	)		21,703
Long-term prepaid expenses and other assets		1,381		-			1,381
Total assets acquired	$	65,135	$	(312	)	$	64,823

Liabilities assumed:
Accounts payable and accrued expenses	$	2,670	$	189		$	2,859
Current liabilities of discontinued operations		588		(141	)		447
Obligations under operating leases		198		-			198
Obligations under finance leases		106		-			106
Deferred revenue		1,293		-			1,293
Income taxes payable		360		(360	)		-
Total liabilities assumed	$	5,215	$	(312	)	$	4,903

Net assets acquired	$	59,920	$	-		$	59,920

We have completed preliminary valuation analyses necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date. These fair values were based on management’s estimates and assumptions; however, the amounts shown above are preliminary in nature and are subject to adjustment, including income tax related amounts, as additional information is obtained about the facts and circumstances that existed as of the acquisition date. Accordingly, there may be adjustments to the assigned values of acquired assets and liabilities, including, but not limited to, intangible assets and property and equipment and their respective estimated useful lives, that may also give rise to material increases or decreases in the amounts of depreciation and amortization expense. The final determination of the fair values and related income tax impacts will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined. The Company has also not yet completed its fair value analysis for a number of items including discontinued operations liabilities. Of the amount of goodwill acquired in the Merger, no portion is deductible for tax purposes.

The Company recognized intangible assets related to the Merger, which consist of the tradename valued at $1.5 million with an estimated useful life of ten years and customer relationships valued at $8.0 million with an estimated useful life of ten years. The value of the vivoPharm tradename was determined using the relief from royalty method based on analysis of profitability and review of market royalty rates. The Company determined that a 1.0% royalty rate was appropriate given the business-to-business nature of the vivoPharm operations. The value of the vivoPharm customer relationships was determined using an excess earnings method based on projected discounted cash flows and historic customer data. Key assumptions in this analysis included an estimated 10% annual customer attrition rate based on historical vivoPharm operations, a blended U.S. federal, state and Australian income tax rate of 27.1%, a present value factor of 8.5% as well as revenue, cost of revenue and operating expense assumptions regarding the future growth, operating expenses, including corporate overhead charges, and required capital investments.

These intangible assets are classified as Level 3 measurements within the fair value hierarchy.

The following presents the unaudited pro forma combined financial information as if the Merger had occurred as of January 1, 2020:

	2021		2020		2021	2020
	For the three months ended June, 30				For the six months ended June 30,
	2021		2020		2021	2020
Total revenues	$	1,947	$	1,545	$